Rec Center: Pump Up the Memberships
The Centre of Elgin in Elgin, Ill.
The Centre of Elgin recreation center in Elgin, Ill., had been losing 5 percent of its fitness club membership every year, five years in a row. The city council had approved money to renovate the facility yet was wary of the facility's operating strategies.
That's when, in 2015, the city hired Verde Martin Inc. to come in and perform a sales audit. At the same time, they hired new manager Eddy Hernandez to work with the firm to collaborate and set new strategies for the recreation center. The result: a 23 percent increase in revenues and a 23 percent increase in membership.
Serving more than 1 million guests annually, The Centre of Elgin is the city's foremost recreational facility, providing residents with nearly 185,000 square feet of leisure space. In addition to the health and fitness club, The Centre features three full-sized basketball courts, two racquetball courts, a preschool wing, a teen/senior center, a natatorium, a climbing wall, meeting rooms, and the Heritage Ballroom, which provides banquet space.
In 2015 the facility's revenue was at its lowest since 2012 at roughly $868,371, and its memberships had declined from 3,480 in 2010 to 3,096 in 2014, according to city documents. Upper management had high tenure, and new ideas were difficult to entertain.
The Elgin City Council proceeded with the purchase of 104 new pieces of equipment for $413,900 and subsequently approved the renovation, which ran $261,190 and included an expanded weight room, and new free weight, weight training and cardiovascular exercise equipment.
The membership fees were set up in tiers—Bronze, Silver, Gold, and Platinum—and the facility also accepted fee-based daily drop-ins. Bronze was simply a pool pass, and Silver was a basic fitness area pass, Gold included both, and Platinum included the pool and the fitness area plus child care and classes. It is considered all-inclusive.
The sales audit began with discovery. Jill Slupe, Verde Martin CEO, developed her firm's sales audit process in 2007 after listening to clients' desire for a sales process strategy, followed by executable tasks that would accelerate sales.
The many modules in the process are contained in a series of workbooks. Slupe led Hernandez and his team through these modules and as a group, tactical findings were made. Spending time in the facility, watching program traffic, talking with employees, looking at the financials, and digging into facility data led the team to strategies for increasing revenue and developing membership, among others.
According to Hernandez, the most unusual and unexpected module of the sales audit process was the Foundation exercise. Hernandez and his team created the Fitness Center's very own mission, vision and values statements to include short-term and long-term goals.
"I knew the City of Elgin had those, but specific to the Fitness Center was unusual to me," Hernandez said. "And it ended up being the most significant strategy because it brought the team together, on the same page, and created a sense of ownership and buy-in. To this very day, we continue to work as a team of owners."
After discovery came measure. Throughout the practical process, gaps were identified and efficiencies were created. Key performance indicators were set, and specifics were given for change achievement.
"I had not used KPIs before in my previous positions," Hernandez said. "KPIs are those numbers or data that indicate the health of an organization. Like number of members, class attendance or days of banquet space use, for example. By developing these KPIs and setting goals for them, my team was able to realize what strategies were working and which were not. We became empowered for the success of the facility and all of its programs."
The final portion of the sales audit process is to accelerate. Tactical findings showed that Centre drop-ins were high, inconsistent and the most expensive option. So, a strategy was developed to enact a membership drive selling the benefits of the all-inclusive, Platinum tier (most profitable) and institute a discount for annual membership contracts.
In 2016 revenues were up 18.6 percent to $1,030,000, and in 2017 they increased another 4 percent to $1,070,000. Membership had grown from 2015 to 3,063 in 2016, a 23.5 percent increase, and the Platinum membership increased more than 300 percent from 199 members to more than 800.
Since 2015, The Centre of Elgin's success story has been featured in the Daily Herald and the Courier (Chicago Tribune) newspapers. Hernandez praised the process, saying "the unique and collaborative sales audit to examine an operation, identify its problems, and find positive solutions and outcomes is fantastic. That my team and I were trained throughout gives us the tools to successfully carry on. The entire experience was a valuable investment for today and tomorrow."
Hernandez and his team continue to discover, measure and accelerate from the education and guidance received through this unique sales audit process improvement training.
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